Download - 2007 Results And 2008 2012 Business Plan
Enel SpAInvestor Relations
2007 Results2008-2012 Plan
“Consolidation, Growth and Financial Stability”
London, March 13, 2008
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Network
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
Consolidation, growth and financial stabilityOpening remarks
• Cash-flow from operations
• Net portfolio optimization
• Capex
• Financial charges
• Dividends
2008-2012 key figures (€bn)
+63
+11/15
-37
-14
-15
Stable dividend policy of 49€c/share8/12€bn net debt reduction
Net debt/EBITDA < 3X by 2012
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Enel SpAInvestor Relations
EPS CAGR2 2007-2012: 10%Net debt 2012: 45-49€bn
2009 2012
1. Ordinary income only2. On a like for like basis
Financial targets
• EBITDA
– Italy
– International
• EPS1
• 13.8€bn
– 6.9€bn
– 6.9€bn
• 62.3€c
• 16.6€bn
– 7.0€bn
– 9.6€bn
• 83.0€c
Opening remarks
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Networks
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
Financial highlights: consolidated
FY06 FY07 %€mn
2007 results
1. Including capital gain raising from Wind-Weather share transaction for 263 €mn2. Net of discontinued operations
Revenues
EBITDA
EBIT
Group net income
Net debt
38,513
8,019
5,8191
3,036
11,690
43,673
10,023
6,990
3,977
55,7912
13.4
25.0
20.1
31.0
-
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Enel SpAInvestor Relations
From EBIT to net income
FY06 FY07 %€mn
EBIT
Net financial charges
Interest charges
Financial income
Fair value of Acciona put option
Other
EBT
Income tax
Net income (including third parties)
Group net income
EPS (€)
5,8191
651
577
-
-
74
5,168
2,067
3,101
3,036
0.49
6,990
902
1,390
(301)
(136)
(51)
6,088
2,002
4,213
3,977
0.64
20.1
38.6
-
-
-
-
17.8
(3.1)
35.9
31.0
30.6
2007 results
1. Including capital gain raising from Wind-Weather share transaction for 263 €mn
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Enel SpAInvestor Relations
EBITDA evolution (€mn)
359 51
9182.380
3.418
3.726
3.157
3.541167
325
8,019 +158+384
+308
+1,462 -30810,023
1. Including intercompany adjustments
Market
FY06 Market G&EM I&N International S&H1 FY07
G&EMI&NInternationalS&H1
2007 results
+2,004
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Enel SpAInvestor Relations
EBITDA evolution: domestic market division (€mn)
2007 results
FY06 Regulatedmarket
FY07Freemarket
Other &non-recurring
167
+108
+132 -82
325
+158
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EBITDA evolution: domestic G&EM division (€mn)
2007 results
FY06 Generation margin
FY07Fair value bilateral contracts with SB
Non-recurring
3,157
+328 +103 -47 3,541
+384
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Enel SpAInvestor Relations
Fuel cost evolution
306.7
Oil (€/ton)
300.8 27.5
Gas (c€/mc)
26.9 58.6
Coal (€/ton)
68.8
51.8 49.3Average fuel cost (€/MWh)
2007 results
FY06 FY07
FY06 FY07FY06 FY07 FY06 FY07
-5%
+17%-2%-2%
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Enel SpAInvestor Relations
3.4183.750 3.726
EBITDA evolution: domestic I&N division (€mn)
+308
3,418
+332 +61 -85 3,726
FY06 Electricity FY07Gas Non-recurring
2007 results
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Enel SpAInvestor Relations
EBITDA evolution: international division (€mn)
+1,462
235
926180
186
389
587
680
16
7107
-15
IberiaSouth-Eastern Europe (SEE)CentrelRussiaAmericasFrance & Belgium
918
+691 +6
+198
2,380
+9
+573 -15
FY06 Iberia FY07Russia AmericasSEE Centrel France& Belgium
2007 results
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EBITDA evolution: services & holding1 (€mn)
1. Including intercompany adjustments
-308
359 -240
-23-45
51
FY06 Import FY07Non-recurring
Other
2007 results
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Enel SpAInvestor Relations
Wind Mini-hydro
OtherGeothermal
Focus on renewables1
1321 1530
588
857671
67847
46
2,6263,112
+18.5% +10.8%
782 40 46 868
+11.0%
Capacity (MW)
FY06 FY07
3,910 4,958
1,2441,293
5,1955,269
327308
10,676 11,828
FY06 FY07
Production (GWh)
EBITDA evolution (€mn)
FY06 FY07Italy Interna-tional
2007 results
1. Excluding large hydro and Endesa
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Enel SpAInvestor Relations
Net debt evolution (€mn)
1. Including 301€mn capital expenditure of Endesa Europa2. Including net debt of acquisitions3. Continuing operations: -55,791€mn; Discontinued operations: -1,725
December31, 2006
CapexCash-flowfrom
operations
Extra-ordinaryactivities
TaxesNetfinancialcharges
Dividends December31, 2007
-11,690-5,2301
+9,130
-43,4792
-1,677-1,390
-3,180 -57,5163
+45,826
2007 results
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Enel SpAInvestor Relations
2007 dividend (€c/share)
On the results of 2006 2007
49 49
2007 results
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Networks
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
A clear and consistent strategy
Strategy overview
• Retain market leadership in Italy in a liberalising market
• International growth through acquisitions
• Improve operational performance through investment program and efficiency
March 2006Priorities for 2006-2010
March 2007Priorities for 2007-2011
• Leadership in the domesticmarket
• International growth
• Operational excellence
• Environment and innovation
2008-2012 strategy
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Enel SpAInvestor Relations
Consolidation, growth and financial stability
Strategic priorities
An
integrated
international
energy
group
An
integrated
international
energy
group
2008-2012 strategy
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear• Growth in renewables and nuclear
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
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Enel SpAInvestor Relations
• Investment in new capacity: CCGT generation increases 24% by 2012
• Cleaner, more balanced production mix
• Opportunity to grow gas market share
• Leadership positions in Spain and Latin America
• Close working relationship with Acciona
• Strong earnings growth potential
Endesa update
Latin America
2008-2012 strategy
Overview
Spain
• Strong demand growth in liberalising markets
• Need for new capacity
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Russia update
2008-2012 strategy
• Upstream gas: 40% stake in SeverEnergya
• Power generation: 59.8% stake in OGK-5
• Supply: 49.5% stake in RusEnergoSbyt
• GDP growth
• Liberalisation on track
• Domestic market price increasing
Opportunity to improve existing capacity
Highly attractive market
First vertically integrated presence in the sector
• 2.2€bn investment in the period 2008-2012 in generation and upstream gas
Strong growth potential
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Enel SpAInvestor Relations
23.2% 22.1%
10.0%
29.1%
14.7%22.5%
20.3% 10.9%
5.1% 5.4%8.1%
28.6%
35%
65%
Balanced activities
Group production mix2012 EBITDA Regulated and unregulated businesses
2006
CoalCCGTOil & gas
NuclearOther renewablesHydroNetworks
Generation & sales
2012
2008-2012 strategy
335.0 (TWh)131.4 (TWh)
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Upstream & midstream gas integration
Midstream
Gas supply
Upstream
Total 2008-2012 cumulated investment : 1€bn
2008-2012 strategy
Strategic lines 2007 achievements Further targets
Participating in E&P projects
Developing transport, storage, and re-gasification capacity projects
Ensuring long-term gas supply
SeverEnergya
GALSI development
Additional gas supply from Algeria
• Opportunities in identified target areas
• LNG terminal in Sicily• Storage capacity
• Gas supply for OGK-5• Additional LNG supply• Supporting international
growth
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Enel SpAInvestor Relations
472
1,602
2007 2012
Strong investment plan of 6.8€bn in totalEBITDA CAGR 07-12: 12.4%
2008-2012 strategy
Renewables (MW)
504
2007 2012
Total capacity (MW)
1,707
4,752
837
47
86
1,530
857
678
2007 2012
3,112
7,382
South-EasternEurope
France
North America
Latin America
Italy
Iberia
OtherGeothermal
1,536
2,781
2007 2012
80
467
2007 2012
664
1,131
2007 2012
360
897
2007 2012
Wind Mini-hydro
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Nuclear
2008-2012 strategy
Participation in the Cernavoda project fortwo 750MW units
TechnologyCANDU 750MW
Romania
Endesa’s nuclearpower plants 2,441MW
TechnologyWestinghouse-PWR1,000 MW
Spain1,2
EPR agreement with EDF
Anticipated nuclearcapacity
TechnologyAreva-PWR 1,600MW
France
SlovenskeElektrarne’snuclear powerPlants 2,050MW
Development of Mochovce units 3 & 4
TechnologyRussian-PWR 440MW
Slovakia2
Presence in leading technologies for nuclear generation
1. Endesa consolidated proportionally (67.05%)2. 2007 figures
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Enel SpAInvestor Relations
21,206
16,038
2008-2012 strategy
Cumulated investment in innovation: 0.6€bnCumulated investment in renewables: 6.8€bn1
Investment plan (€mn)
Cumulated 2008-2012
5,047 4,9754,147
2,921
3,479 3,0502,855
2,727
4,115
3,928
2008 2009 2010 2011 2012
8,043 8,526 8,0257,002
5,648
Maintenance Growth 37,244
1. Excluding large hydro and Endesa
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Portfolio optimization
2008-2012 strategy
A wide range of assets available for optimization
Estimated value
11/15 €bn
2008
2008
2009
2012
Expected completion
• Disposal to EON• Disposal to EON
• Non-strategic networks• Non-strategic networks
• Renewable business• Renewable business
• Potential add-on investments
• Potential add-on investments
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Enel SpAInvestor Relations
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Networks
– International
– Iberia & Latin America
• Questions and answers
• Annexes
Agenda
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Enel SpAInvestor Relations
Strategic priorities
• Leadership in the free energy market
• Group margin protection
• Excellence in customer service
• Innovation
• Leadership in the free energy market
• Group margin protection
• Excellence in customer service
• Innovation
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear• Growth in renewables and nuclear
2008-2012 plan - Domestic Market
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
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Enel SpAInvestor Relations
154 173225
278
895440 43
4445
12481
62
337
2006 2007 2009 2012
340358 377
Enel the main driver of growth in the free market
2006-2012 electricity free market1 evolution (TWh)
Self-consumption and losses
Key market drivers
1. Source: Enel’s estimates
• Full market opening as from July 2007
• Capability to reach and manage multi-million client portfolio
• Dual Energy and renewable energy
+1.9%
Captive market
Eligible market
Free market
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Electricity market evolution 2006-20121
Number of customers (mn)Electricity consumption (TWh)
Free marketEligible market
Self consumption and losses Captive market
1. Source: 2006 volumes = Terna; 2006 customers = AEEG; 2007-2012 volumes and customers = Enel’s estimates
154 173225
278
12489
54
-40 -43 -44 -45
81
62
297
~48% ~41%~28%
297
2006 2007 2009 2012
314 332
~16%
2.7 9.819.0
33.026.3
18.6
0.77.3
27.4~99%
2006 2007 2009 2012
~92%~73%
35.4 35.7 36.1 37.6
~50%
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
2007-2012 gas market evolution1,2 (bcm)
21.5 22.4
30.5 31.5
20.7
28.0
1.21.22.1
1. Excluding gas burnt for thermal generation2. Source: Ministry of Economic Development and Enel’s estimates
50.8
2007 2009 2012
53.2 55.1
Other uses
Residential market
Industrialmarket
Renewed interest in dual energy
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
13.6 15.3 15.3
28.6
56.9
81.8
2007 2009 2012
Gas (bcm)
2007 2009 2012
7.2
9.2
4.9
• Selection of market segment consistent with strategy in power market
• Dual energy offer sustains customer retention
Fast selective growth of customer base
Enel’s targets in 2012
Electricity free market1 (TWh)
42.2
Retail & BusinessEnergy intensive
• Strong increase in SME and residential portfolio
• Reduced sales to Single Buyer
• Excellence in service quality
Electricity regulated market (TWh)
2007 2009 2012
61
33
102
• Volume decline in line with Enel’sincrease on the free market
1. Including technical losses2. Enel’s estimates
Market share2
82.2% 61.0%
Market share2
82.2% 61.0%Market share2
20.8% 32.8%
Market share2
20.8% 32.8%Market share2
9.6% 16.6%
Market share2
9.6% 16.6%
72.2
97.1
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Enel’s domestic targets in 2012: electricity free market1
13.6 15.38.6 7.0
15.37.0
52.219.9
40.4
9.5
22.6
0.1
Strong penetration in SME and retail segmentsTargeting 14mn customers
Gas, electric and Dual Energy customers on the free market (mn)
1. Including technical losses
14.1
8.7
4.5
42.2 (TWh)
2007 2009 2012
Residential
Micro & medium businesses (<1GWh/year)Large businesses (1-100GWh/ year)
Energy intensive (>100GWh/ year)
72.2 (TWh)
97.1 (TWh)
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Enel forward selling 2007-20101
2007TWh
1. Including technical losses~8%; churn 5% per year; Total portfolio as of 22 February 2008;2. Salvaguardia 2007: energy traded between Enel Trade and Enel Distribuzione (August-December 2007)
0.1
19.9
13.5
8.6
7.7
49.8
2008
2.6
31.0
15.3
8.6
11.8
69.3
2009
2.5
30.2
14.7
5.8
-
53.2
2010
2.4
28.7
0.7
-
-
31.8
Business and microbusiness
Industrial
Residential
Large customers
Salvaguardia2
TOTAL SALES
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Source: Enel’s estimates.
PV evolution (MWp)
128
4
82
18
28
13
2007
17
46
210
2009 2012
Market Share
Leadership in Photovoltaic Market
• Partnership with world leaders in PV production and supply
• Strong incentive schemes
• Large diffusion on final customers
Main drivers
34% 42%40%
PV directPV indirect
Growth in photovoltaic solar energy through Enel.Si
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Cost-to-serve and customer satisfaction of the free energy market
3725
9
3
20
6
7
89
0
5
10
15
20
25
30
35
40
45
50
0
1
2
3
4
5
6
7
8
9
10
Strong focus on cost-to-serve reduction whilst improving customer satisfaction to
best-in-class level
Customer satisfaction (1-10)Cost to serve (€/customer)
46
3123
Personnel costsExternal costs
2007 2009 2012
2008-2012 plan - Domestic Market
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Free energy customers (mn)Acquisition cost (€/customer)
4.5
14.1
8.729
32
50
0
2
4
6
8
10
12
14
16
0
5
10
15
20
25
30
35
40
45
50
Acquisition costs in the free energy market
Efficient use of acquisition channels
2007 2009 2012
2008-2012 plan - Domestic Market
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Networks
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
Strategic priorities
• Investment plan and operational excellence
• Sustained profits
• Innovation
• Investment plan and operational excellence
• Sustained profits
• Innovation
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear• Growth in renewables and nuclear
2008-2012 plan - Domestic Generation and Energy Management
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
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Enel SpAInvestor Relations
Repowering
48%
20%18%
14%
CCGT Oil & Gas ST/OCGTRenewables Coal
2.3
3.08.3
0.8
1.1
2.33.0
0.4
Market scenario
Italian energy mix1 (2007) Additional CCGT capacity (GW)
Greenfield
3.1
4.1
3.4 10.6
Source: Enel’s estimates
Dominant role of CCGT technologyPower prices driven by gas/oil prices
2007 2008 2009-2010 (under
construction)
Target
2008-2012 plan - Domestic Generation and Energy Management
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Enel SpAInvestor Relations
Development of the generation mix
• Oil & gas ST/OCGT: ancillaryservices market, price spikes, export opportunities
• CCGT conversion program completed: mid merit technology
• Torre Nord 1st unit in operation in 2008: increase in base loadproduction
• Increasing renewable energydevelopment
24.0% 29.0% 30.0%
30.0%
50.0%9.0%
24.0%
20.0%
45.0%
17.0%
22.0%
CCGTOil & gasCoal
Renewables
Re-powering program on track
CCGT conversion
Clean coal conversion\ Renewables development
2002 2007 Target
<1%
2008-2012 plan - Domestic Generation and Energy Management
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Torre Nord development
1st unit in operation in 2008, 2nd and 3rd in 20092 GW @ 45% thermal efficiency
1st unit DeSOx completion 1st dome coal handling system completion
2008-2012 plan - Domestic Generation and Energy Management
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Growth in renewables (€mn)
Investments (€bn) Additional installed capacity (GW)
2.7
0.6
1.0
0.6
2007-2011Plan
1.6
3.3
2008-2012Plan
MaintenanceGrowth
2007-2011Plan
0.4
1.4
2008-2012Plan
Positive regulatory frameworkWide portfolio of projects with high return on investment
~1.4 GW of new installed capacity by 2012
2008-2012 plan - Domestic Generation and Energy Management
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Innovation
• Enhanced efficiency power plants
• Carbon capture and storagetechnologies
• >400€mn investment in 5 years forpilot and demonstration projects
Building the long term fossil fuel power plant
sustainability
Innovation for renewables
• Advanced photovoltaic solutions
• Concentrated thermodynamic solar
• Geothermal
• 150€mn investment in 5 years forinnovative projects
Zero emission plants by 2020 is not a dream, but a realistic objective
2008-2012 plan - Domestic Generation and Energy Management
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CO2
Variable costs1 (€/MWh)
36
65
17
8
CO2 costsVariable costs
53
73
Enel’s balance 2008-2012 (mton CO2e)
40÷45
1. Based on forward Brent = 86.5 $/bbl; API2 = 100.3$/ton; CO2 = 22€/ton; €/$ = 1.44
Clean coal strongly competitive even withvery high CO2 prices
2008÷2012 CO2 position already hedged
2008-2012 plan - Domestic Generation and Energy Management
ShortageClean coal CCGTExpected emissions Allocations
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CO2 Emissions Trading Scheme: 2008-2012
• Among top carbon market players
• Competitive sourcing; mark tomarket portfolio >500€mn
• Robust portfolio (75% of expectedCERs without anyapproval/implementation risk)
• Day-by-day portfolio management to minimize carbon exposure
• Post 2012: Enel’s generation fleethedged vs CO2 prices
CERs – Existing projects portfolio (Mton)
56
19 75 ~35
~40
Registered & implemented
To be registered& implemented
Expected Directuse for compliance
Traded onsecondarymarket
2008-2012 plan - Domestic Generation and Energy Management
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Coal and shipping sourcing strategy
Coverage of sourcing needs (%)
~100
70
Coal Shipping
80
50
Coal sourcing diversification
Indonesia
South Africa
Colombia
Russia
USA
Total portfolio – Mark to market > €1 bn
Major portion of mid term needs securedGeographical diversification of coal sources Flexible and competitive shipping sourcing
2008-2012 plan - Domestic Generation and Energy Management
2008 2009 2008 2009
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Power sales & trading
Trading deals in European power markets(TWh)
Sales coverage (%)
~80
2006 2007 2008
~140
~300
Increasing business opportunities
2008 2009
>50
100
Strong protection of generation margins
2008-2012 plan - Domestic Generation and Energy Management
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Targets
2008-2012 Enel additional installed capacity (GW)
Renewables
Coal 1.9
1.4
Maintenance Growth
2008-2012 total capex = 6€bn
80%
20%
• Thermal production
• Thermal variable cost
• Renewables production
2008-2012 plan - Domestic Generation and Energy Management
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• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Networks
– International
– Iberia & Latin America
• Questions and answers
• Annexes
Agenda
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Enel SpAInvestor Relations
Strategic priorities
• Cost leadership
• Operational excellence
• Growth in gas distribution
• Innovation
• Cost leadership
• Operational excellence
• Growth in gas distribution
• Innovation
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear• Growth in renewables and nuclear
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
2008-2012 plan - Domestic Infrastructure & Networks
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Enel SpAInvestor Relations
2012
Market share1 80% 80%Market share1 80% 80%
Electricity distributed (TWh)
1. Net of network losses, including self-generation2. Not including gas for generation units
Gas distributed (bcm)
2007-2012 CAGR+2.0%
32 million end-users connected by 2012
3.7 3.54.1
5.0
2007-2012 CAGR+7.4%
2.9 million end-users connected by 2012
Market share2 11% 16%Market share2 11% 16%
Evolution of Enel electricity and gas distribution
2006 2007 2009
2008-2012 plan - Domestic Infrastructure & Networks
255 256
268
282
2006 2007 2009 2012
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Cost leadership and operational excellence
2008-2012 plan - Domestic Infrastructure & Networks
Opex (€/customer)
Quality of service(min interruption/year)
2002
20042003
20052006
2001 (128 min ; 80 €/customer)80
60
30
2007 (49 min ; 50 €/customer)40
80130
930€mn yearly opex savings vs 2001
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Network commercial operations
2008-2012 plan - Domestic Infrastructure & Networks
Switching to the free marketEnd users on the free market (thousands)
Commercial quality of service
June 2007 Dec 2007
1,180
1,870
3.8
3.9
2006 2007
# of customer request (mn)Quality index (%)
98.2 98.3
Market liberalization supports steady improvement of commercial quality index
+58%
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2008-2012 electricity tariff revenues (€mn)
2008-2012 plan - Domestic Infrastructure & Networks
4,3404,180
680510
4,850 4,860
2007 2008
32%24%
44%
Regulated commercialactivitiesDistribution andmetering
DepreciationReturn on RABOpex
2004-2007 2008-2012
~20€bn
7.0%
3.5%
~22€bn
7.0%
2.2%3
1.4%4
RAB1
X-factor
WACC2
1.Beginning of period, including commercial activities2.Real pre-tax3.Applied only to opex and resulting from the weighted average of 1.9% (distribution) and 5.0% (metering)
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Ongoing operational excellence projects
2008-2012 plan - Domestic Infrastructure & Networks
Work force management
• 5,300 equipped vehiclesin 2008
• Field activityoptimization
• Paperless operations
Work force management
• 5,300 equipped vehiclesin 2008
• Field activityoptimization
• Paperless operations
Power and gas integration
• Staff and activityintegration
• Synergies in IT systems
• Increase in insourcing
Power and gas integration
• Staff and activityintegration
• Synergies in IT systems
• Increase in insourcing
Pegaso “Lean Six Sigma”
• Continuous improvement
• Waste and variabilityreduction
• Focus on value-addedactivities
Pegaso “Lean Six Sigma”
• Continuous improvement
• Waste and variabilityreduction
• Focus on value-addedactivities
Additional 200€mn opex savings from 2009 vs 2006
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Enel SpAInvestor Relations
4944 42 41
Quality of service
2008-2012 plan - Domestic Infrastructure & Networks
430€mn quality premia in 2008-2012
183
80
140
50
2007 2009 2011 2012
Min. interruption/customerQuality premia
59
Enel SpAInvestor Relations
Growth in gas distribution
2008-2012 plan - Domestic Infrastructure & Networks
End-users (thousands)
2,032
2007 2009 2012
2,270
2,920
+7.5%
• Drivers for growth:
– network extension
– bid for new concessions
• More than 4,000 concessions expiringin 2009 in the Italian market
Increase of margins through business development, cost reduction and power and gas synergies
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Enel SpAInvestor Relations
Innovation
Smart Grids
• Integration and management of renewables
• Local energy dispatching
• Self-fixing grids
Co-funded EU FrameworkProgram 7 project
Electronic metering for electricity and gas
• Exploitation of remote management of gas meters
• Development of a multi-metering infrastructure
210 mn remote readings>10 mn operations in 2008
2008-2012 plan - Domestic Infrastructure & Networks
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Enel SpAInvestor Relations
Targets
2008-2012 plan - Domestic Infrastructure & Networks
50
80
Electric network opex
2009 2012 2006 2007
EUaverage
UKaverage
55 50 50 48
6.7 5.9 5.7 5.4
51%24%
9%
16%
Gas - MandatoryElectricity - MandatoryElectricity – Quality of serviceElectricity – Connections1
2008-2012 total capex = 6.8€bn
1.Average customer contribution: 90%
€/MWh€/customer
Delivery of strong EBITDA results over the period 2008-12
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Enel SpAInvestor Relations
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Network
– International
– Iberia & Latin America
• Questions and answers
• Annexes
Agenda
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Enel SpAInvestor Relations
Strategic priorities
International
• Consolidation of international presence
– organic growth
– efficiency and integration
• Development of new initiatives
• Innovation
• Consolidation of international presence
– organic growth
– efficiency and integration
• Development of new initiatives
• Innovation
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear• Growth in renewables and nuclear
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
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Enel SpAInvestor Relations
Enel’s current positioning ex Endesa
International
Inst. cap. 8.7GWNet prod. 36TWhSales 35TWhGas production 28bcm/y(from 2016)
Russia
BulgariaInst. cap. 660MWNet prod. 3.5TWh
RomaniaDistr. network 53,227kmEE distributed 7.3TWhCustomers 1.4mnMarket share ~11%(supply)Market share ~15%(distribution)
Greece447MW CCGT under development
Inst. Cap. 80MWNet prod. 53GWh
South-Eastern Europe
SlovakiaInst. cap. 5.6GWNet prod. 21.5TWh
Centrel
EPR nuclear project
Wholesalesupplierof electricity 1.8TWh
Renewables 500MW(pipeline)
France & Belgium
Figures as of 2007
Focus on renewables
Inst. Cap. 472MWNet prod. 1.2TWh
North America
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Enel SpAInvestor Relations
1.0
Market outlookElectricity demand growth (TWh) Increasing dark spread
International - Russia
CAGR: 2.5%
2008 2009 2010 2011 20122007
1,200
1,100
1,000
900
2.5
2.0
1.5
Gas
2008 2009 2010 20112007
Coal
Fu
el
pri
ce in
dex
• Huge market with dramatic growth potential
• Undergoing liberalization and privatization processin line with expected schedule
• Opportunity to improve existing capacity
• Coal assets in gas-fired regions will benefitmost from deregulation
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Enel SpAInvestor Relations
Early mover advantage and reduced risksin a huge, liberalizing market
40% of a JV with ENI20% from 2009 (Gazprom call option)
• 8.7 GW gross capacity, with balanced mix (50% gas and 50% coal)
• 36 TWh generated in 2007, with 100% exposure to Western Russia and Urals
• EBITDA: 99 €mn
• Headcount (#): 4,287
59.8% of OGK-5 49.5% of RusEnergoSbyt
Enel the first vertically integrated energy operator1
o
• At full production, 40%-50% of OGK-5 demand
• Gas reserves: 700 bcm
• Full production: 28bcm/y (2016)
• Partnership with E&P leading companies in a world wide project
• Value of gas reserves in a tight domestic market
• A unique opportunity to participate in the supply sector
• 35TWh sold in 2007
• Strong regional reach with 25 offices and 7 branches
• Customers (#): 249,000
• Headcount (#): ~900
RusEnergoSbytSupply
OGK-5Power generation
SeverEnergyaUpstream gas
International - Russia
1.RES figures refer to 100%
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Enel SpAInvestor Relations
1. Figures as of 2007
Overview of OGK-5 assets1
• Installed capacity 2.4GW
• Fuel gas
• Production 8.2TWh
Konakovskaya GRES
Tver Region
Enel owns 59.8% of OGK-5
OGK-5 assets include the largest Russian coal plant
2008-2012Additional capacity: 723 MW
CAPEX: 1.5 €bnProduction: from 38 to 51 TWh
• Installed capacity 1.2GW
• Fuel gas
• Production 6.8TWh
Sredneuralskaya GRES
Sverdlovsk Region
• Installed capacity 3.8GW
• Fuel coal
• Production 15.5TWh
Reftinskaya GRES
Sverdlovsk Region
• Installed capacity 1.3GW
• Fuel gas
• Production 5.9TWh
Nevinnomysskaya GRES
Stavropol Region
Moscow ●
International - Russia
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Enel SpAInvestor Relations
CAGR: 1.6%
2008 2009 2010 2011 20122007
28
27
26
25
Market outlook
South EasternEurope
5.6 TWh
1.2 TWh
5.1 TWh
16.3 TWh
Germany
Poland
Slovakia
NordelSystem
Russia
CzechRepublic
Hungary
Interconnection flows Market fundamentals
• Demand growth rate: 1.6% CAGR 2007-2012
• Market prices converging to German ones, Europe’s largestand most liquid market
• High interconnection capacity
• Very low reserve margin after shut-down of old plants; needfor additional capacity
Slovenské Elektrárne
Strategic targets
• Expansion of nuclear capacity
• Hedging generation through long-term selling contracts
• Strengthening our leadership: organic growth and efficiency plan
• Capacity (GW)
• Production (TWh)
5.6
21.5
• EBITDA 2007 (€mn)
• Headcount (#)
• 2008-2012 CAPEX (€bn)
580
6,408
1.9Slovakia - Electricity demand growth (TWh)
29
30
International - Centrel
Figures as of 2007
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Enel SpAInvestor Relations
Market outlook
GreeceAlbania1
5.6 TWhItaly
RomaniaSlovenia
Bosnia & Herzegovina
Croazia
SerbiaKosovo
MontenegroBulgaria
Macedonia
Centrel5,6 TWh
• Liberalization, GDP and electricity demand growth
• Progressive entry into the EU perimeter
• Strong need for investments in new capacity (10GW) and interconnections
Market fundamentals
Romania• Integration of Muntenia Sud
• Hedging of retail position through generation assets(coal and nuclear) and replicate Enel’s verticallyintegrated business model
• Renewables: 175 MW of wind (Blue Line)in 2010
Strategic targets
• Growth in renewables (Romania, Greece)
• One import coal or lignite power plant plus one CCGT
Greece - CAGR: 2.6%
2008 2009 2010 2011 20122007
60
50
40
30
Electricity demand growth (TWh)
Romania - CAGR: 2.1%
Bulgaria - CAGR: 1.8%
International – South Eastern Europe
Figures as of 2007
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Enel SpAInvestor Relations
500
Market outlook
• Appealing market fundamentals
• Developed and increasingly liquid pools
• High level of interconnection with rest of Europe
• Clear regulatory framework
Market fundamentals
Enel France1
• Sales (TWh)
• Anticipated capacity (MW)
1.8
200
France
Belgium
• CCGT and coal power plants
• Renewables: Enel Erelis (504 MW pipeline of wind generation projects)
• EPR Nuclear participation: Flamanville 3
• Partnership with Duferco for a thermal plant(CCGT - 410MW)
Strategic targets
CAGR: 1.6%
2008 2009 2010 2011 20122007
490
480
470
460
France - Electricity demand growth (TWh)
510
520
International – France and Belgium
Figures as of 2007
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Enel SpAInvestor Relations
Market outlook
• Appealing market fundamentals
• Clear regulatory framework
• Wind market growing at double digit annual rates
Market fundamentals
Enel North America (Renewables)• Capacity (MW)
• Production (TWh)
• EBITDA (€mn)
• Headcount (#)
472
1.2
30
224
• 1,130 MW of additional generation capacity, of which:
– 59MW geothermal
– 1,071MW wind
Strategic targets21
314
130
7
BiomassGeothermalWind Mini-hydro
Net installed capacity (MW)
International – North America
472
Figures as of 2007
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Enel SpAInvestor Relations
Cash generation through strong financial performances
Financial targets (€mn)
633 763
306454
380
1,219
580
18616
226
109
15
2007 2009 2012
7971,427
2,662
EBITDA (€mn)SE EuropeCentrel
Russia Other
563147
569
305
661
276
132174
3
320
438
280
2007 2009 2012
589
2,231
1,048
Capex (€mn)
5,295 5,373
898 1,699
8,2208,943
970
2,516
5,633
661472
2007 2009 2012
6,766
15,383
18,531
Capacity (MW)
2008-2012: 8.2€bn
International
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Network
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
Strategic priorities
Iberia & Latin America
• Solid relationship with Acciona to capture strong potential growth of Endesa
• Reinforce leadership positions in Spain and Latin America
• Integration sales/generation and cooperation Enel/Endesain fuel sourcing
• Implement enhanced synergy plan including establishment of best practices
• Strong focus on renewables
• Solid relationship with Acciona to capture strong potential growth of Endesa
• Reinforce leadership positions in Spain and Latin America
• Integration sales/generation and cooperation Enel/Endesain fuel sourcing
• Implement enhanced synergy plan including establishment of best practices
• Strong focus on renewables
• Leadership in core markets• Leadership in core markets
• Vertical integration• Vertical integration
• Operational excellence• Operational excellence
• Growth in renewables and nuclear
• Growth in renewables and nuclear
• Consolidation and valueenhancement of new acquisitions
• Consolidation and valueenhancement of new acquisitions
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Enel SpAInvestor Relations
Strong market fundamentals
Iberia & Latin America – Spain and Portugal
236 252 284
15 15 1619
260
• Towards full market liberalization
• Increase in renewable and CCGT capacity
• Decrease in gas/oil and coal
CAGR
5.1%
Energy demand growth (TWh)PeninsularExtra peninsular
2007 2008 2009 2012
CAGR: 3.8%
251 267 276 303
3.8%
Mainland peak demand growth (MW) and reserve margin trend
2007 2008 2009 2012
CAGR: 3.6%
44.9
48.149.6
53.5
1.15Reserve margin 1.111.101.12
42.9
57.959.4
62.0
60.0
High case
Low case
Pool price evolution1 (€/MWh)
1. Capacity payment not included
2007 2008 2009 2012
Market main features
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Enel SpAInvestor Relations
Regulatory framework in evolution
Iberia & Latin America – Spain and Portugal
CO2 decree
Electricaldistribution
remunerationmodel
Full market liberalization
Main features Implications
• 100% of customers are eligible• Gradual cancellation of regulated tariff:
– June 2008: HV clients– January 2009: MV clients– January 2011: LV clients > 15KW
• ‘Last resort’ model with recognition of real cost of energy
Remain the leading player in the liberalized market
Key issues
• Law proposal will be debated in the Spanigh Parliament• Still to be translated into norms
Common industry position
• Presently: individual remuneration for each distributor with (i) specific efficiency factor and (ii) recognition of specific demand increase
• RAB model regulation approved• Time schedule and process established to implement the
digital metering system nationwide
Positive framework for:• new investments• losses reduction• quality improvement
Capacitypaymentscheme
• Availability• New capacity• Investment in desulphurization
Remuneration needs to increase in order to properly support new capacity
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Enel SpAInvestor Relations
Leading and balanced position in generation and sales
Iberia & Latin America – Spain and Portugal
• Strong present position:
– 41% total sales market share
– 52.6% liberalized market share
• An efficient sales organisation
• Dual fuel offering
• An increasing portfolio of valueadded services
Endesa total retail sales1 (TWh)
4284 94
8146 49
Free marketRegulated market/last resort
2007 2009 2012
+16.0%
123 130 143
Note: figures relating to 100% of Endesa1. Including peninsular, islands, Portugal and Andorra2. Including pensinsular, islands, Portugal and Andorra. 2007 net of asset disposal
Endesa generation output2 (TWh)
2007 2009 2012
85 93106
+25.0%
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Enel SpAInvestor Relations
Investment plan: capacity addition
Generation mix evolution mainland1 (MW)2008-12 capacity: +4,838 MW
6.0%
26.0%
26.0%
21.0% 19.0%
31.0% 29.0%
30.0%
12.0%
Coal
CCGT
Oil & gas
Nuclear
Hydro
64%74%
Pen
insu
lar
Isla
nd
s
3,2001
400
1,238
Towards a wider, cleaner, balanced and flexible generation platform to competitively support
and hedge the sales positionNote: figures relating to 100% of Endesa1. Including Portugal. 2007 net of asset disposal
2007 2012
Iberia & Latin America – Spain and Portugal
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Enel SpAInvestor Relations
Strong position in CO2 emission rights
Iberia & Latin America – Spain and Portugal
2008-2012 emissions and rights1 (mton CO2)
213
127
33
0
5386
Deficit to be covered by
Emission rights assigned
Emissions Rights CDMs2 Market purchase
Projects for 91mtons of CO2 with ERPA contract signed or LoIand price defined
Note: figures relating to 100% of Endesa1. The information included in the slide hereof refers to Endesa’s total generation assets, i.e. including the non-mainland
systems2. CDMs can be used up to 42% of assigned rights (i.e., 53mtons CO2)
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Enel SpAInvestor Relations
Leading position in distribution and synergy plan
• After relevant investments in recent years, capex in distribution will focus on
– keeping quality at current levels, better than the Spanish market average
– anticipating market growth: 2008-2012 CAGR = 3.9%
• Execution of the synergy plan
Iberia & Latin America – Spain and Portugal
02:25
02:10
01:51
02:02
01:5501:45
02:4402:54
01:37
Spain
Endesa
Distribution – Interruption time (h:mm/year)
2004 2005 2006 2007
Not including transmission
Investments (€mn/year)
Average2004-2007
-22.0%
~900
Average2008-2012
<700
Note: figures relating to 100% of Endesa
• Implementation of the digital metering system
– 13mn meters
– full digital coverage by2015
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Enel SpAInvestor Relations
Gas market
• Leveraging on
– strong market growth (4.8%)
– good present position
– existing effective sales organisation
– Dual fuel offering
– ability to source gas competitively
• Opportunities to increase transmission and distribution gas businesses through
– concessions
– administrative authorizations
Iberia & Latin America – Spain and Portugal
Total sales (TWh)
31.644.0
49.9
0.10.7
2.3
+47.0%
2007
33.9
44.750.0
2009 2012
Free marketRegulated market
14% 18% 20%Endesa share on total Spanish gas market
Strengthening its current no. 2 position Note: figures relating to 100% of Endesa
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Enel SpAInvestor Relations
Targets
Iberia & Latin America – Spain and Portugal
2008-2012 capex: 10.3€bn
7DistributionGeneration
Other
36%
7%
57%
EBITDA (€mn)
20071
3,619
4,226
5,038
2009 2012
CAGR: 6.8%
1. Net of asset disposal
Investing for growth
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Enel SpAInvestor Relations
Chile, Colombia & Peru – market outlook
Iberia & Latin America – Latam
Chile
Peru
Colombia38.6
81.0
Monomicregulatedprice ($/MWh)
41.6
33.1
2007
2004
2002
36.3
34.5
36.3
2007
2004
2002
29.7
23.6
2007
2004
2002
2007-2012DemandGrowth(CAGR)
6.5%
4.4%
6.2%
2012reservemargin
18%
16.3%
6.4%
CountryRisk (S&Prating)
A+
BB+
BB+
Regulatoryframework
Advanced and stable
Advanced and stable
Advanced and stable
• Favourable country outlook
• Advanced and stableregulatory framework
• Strong demand growth
• Need for new capacity
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Enel SpAInvestor Relations
Colombia
Generation• A total of 199MW to be added
Distribution• Sales growth: +6.0% (07-12 CAGR)• Cash cost/MWh reduction: -26%
Colombia
Generation• A total of 199MW to be added
Distribution• Sales growth: +6.0% (07-12 CAGR)• Cash cost/MWh reduction: -26%
Chile
Generation• A total of 1,480MW to be added
Distribution• Sales growth: +6.1% (07-12 CAGR)• Cash cost/MWh reduction: -22%
Chile
Generation• A total of 1,480MW to be added
Distribution• Sales growth: +6.1% (07-12 CAGR)• Cash cost/MWh reduction: -22%
Colombia
Generation• A total of 259MW to be added
Distribution• Sales growth: +6.4% (07-12 CAGR)• Losses reduction: 1.3% (07-12)• Cash cost/MWh reduction: -16%
Colombia
Generation• A total of 259MW to be added
Distribution• Sales growth: +6.4% (07-12 CAGR)• Losses reduction: 1.3% (07-12)• Cash cost/MWh reduction: -16%
• A total of 1,938 MW to be added
• Efficiency and losses reduction programs in distribution
• Considering potential distribution company acquisition
Leadership in the Andean area in generation and distribution
Iberia & Latin America – Latam
Note: figures relating to 100% of EndesaEfficiency improvement data refer to the 2007-2012 period
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Enel SpAInvestor Relations
Country fundamentals
Monomic regulated 2007-2012 2012Price ($/MWh) demand growth reserve
(CAGR) margin
Country risk Regulatory(S&P rating) framework
• Largest market in the region• Strong demand growth• Improving country outlook and regulation
framework
Country fundamentals
Monomic regulated 2007-2012 2012Price ($/MWh) demand growth reserve
(CAGR) margin
Country risk Regulatory(S&P rating) framework
• Largest market in the region• Strong demand growth• Improving country outlook and regulation
framework
New capacity addition and increase in distribution efficiency
Note: figures relating to 100% of Endesa
Brazil – Market fundamentals and strategy
Iberia & Latin America – Latam
Endesa plan highlights
Generation• A total of 200MW of hydro capacity
to be added• Consider potential acquisition
opportunities in hydro
Distribution• Sales growth: +5.6% (07-12 CAGR)• Losses reduction: -2.9% (Ampla)• Cash cost/MWh reduction:
– Ampla: -29%– Coelce: -12%
Endesa plan highlights
Generation• A total of 200MW of hydro capacity
to be added• Consider potential acquisition
opportunities in hydro
Distribution• Sales growth: +5.6% (07-12 CAGR)• Losses reduction: -2.9% (Ampla)• Cash cost/MWh reduction:
– Ampla: -29%– Coelce: -12%
44.5
37.5
23.7
2007
2004
2002
5.6%1%
BB+ Stable
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Enel SpAInvestor Relations
Country fundamentals
Monomic regulated 2007-2012 2012Price ($/MWh) demand growth reserve
(CAGR) margin
Country risk Regulatory(S&P rating) framework
• Economic recovery• Regulatory framework still partially uncertain
Country fundamentals
Monomic regulated 2007-2012 2012Price ($/MWh) demand growth reserve
(CAGR) margin
Country risk Regulatory(S&P rating) framework
• Economic recovery• Regulatory framework still partially uncertain
Note: figures relating to 100% of Endesa
Argentina – Market fundamentals and strategy
Iberia & Latin America – Latam
16.1
12.9
9.8
2007
2004
2002
5.0%15%
B+Evolution
under discussion
Endesa plan highlights
Distribution• Sales growth: +5.0% (07-12 CAGR)• Losses reduction: -0.6%• Cash cost/MWh increase: +24% vs
2007
Endesa plan highlights
Distribution• Sales growth: +5.0% (07-12 CAGR)• Losses reduction: -0.6%• Cash cost/MWh increase: +24% vs
2007
Improving regulatory framework ….opportunities for growth
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Enel SpAInvestor Relations
Targets
Iberia & Latin America – Latam
2008-2012 capex: 6.5€bn
7
DistributionGeneration
Other
36%
7%
53%
EBITDA (€mn)
2007
2,5412,825
3,474
2009 2012
CAGR: 6.5%
Investing for growth
11Peru11%
Chile36%
Colombia19%
Brazil26%
Argentina8%
A total of 2,138MW to be added
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Enel SpAInvestor Relations
Best practice sharing and economy of scale savings (€mn)
Iberia & Latin America
223
230198
175
404132
282 430
1012
331
7 3116
EfficiencProgramsincludedin the previous strategic plan1
Synergiespresented inLondon on12.12. 20072
Furthersynergies
Total yearlysavings @ 2012 included in thecurrent strategic plan
330
68054 1,064
150 155
97
123
54
216
9454
525
Allocationby business
Allocationby geographicalarea
734 734Furthersynergies
Energymngmt
Distribution
Generation
Procurement
Corporate& other
Corporate& other
Iberia
Latin America
Defined synergies: structured implementation undergoingAdditional synergies: over 30 projects in progress, mainly
in Latin America
Note: figures relating to 100% of Endesa1. Savings net of Europe till 20112. Synergies and efficiencies in 2012 identified through the new shareholder structure. Gross of implementation costs
CapexOpex
Margin increase
89
Enel SpAInvestor Relations
10.3
6.5
1.00.62.5
3.5
Overall investments
Organic complementary (Greece, Morocco and other markets)
Iberia & Latin America
Note: figures relating to 100% of Endesa
18.4€bn
6€bnM&A
Iberia organic
Latin America organic
RenewablesMiscellaneous
20.9€bn
A new wave of investment
24.4
• Strong financial potential
• Organic growth: 18.4€bn
• Complementary organic growth: 2.5€bn
• Business development: 3.5€bn
• Flexibility
Investment plan 2008-2012 (€mn)
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Enel SpAInvestor Relations
TargetsTargets
Ordinary income after taxes andminority interests
6,200
9,491 3,461
2,061
Iberia & Latin America
2007 homog 2012
EBITDA (€mn)
CAGR: 8.9%
2007 homog 2012
Double digit income growth
CAGR: 10.9%
Note: figures relating to 100% of Endesa
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Enel SpAInvestor Relations
Enel Union Fenosa RenovablesEnel Union Fenosa Renovables
• Favourable regulatory conditions• Strengthened development organization• Good development record 2007• Good turbine supply platform
Iberia & Latin America
Installed capacity more than doubles by 2012
76%24%
Installed capacity (MW) CAPEX: 1,888 €mn
2007 2009 2012
722 1,114
1,794
CAGR: 20%
EBITDA (€mn)
2007 2009 2012
89
202 322
OtherWind
CAGR: 29.3%
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Enel SpAInvestor Relations
Enel Latin AmericaEnel Latin America
• Geothermal development in Central America and Chile• Hydro development in Costa Rica, Guatemala and Chile• Wind development in Brasil and Mexico
Iberia & Latin America
33%
28%
39%
Installed capacity (MW) CAPEX: 1,085 €mn
2007 2009 2012
664 669
1,131
CAGR: 11.2%
EBITDA (€mn)
2007 2009 2012
119 161
264
WindHydro
CAGR: 17.3% Geothermal
Growth in geothermal, hydro & wind
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Enel SpAInvestor Relations
Endesa1
Financial targets (€mn)
5,1466,364
162
264
4,157
119
102
161
44
2007 2009 2012
4,320
5,410
6,789
EBITDA (€mn)
Enel Latin AmericaEUFER2
Capex (€mn)
Iberia & Latin America
1. Based on proportional consolidation (67.05% stake). FY07 proforma2. Based on proportional consolidation (50% stake)
Endesa1
2008-2012
18,393
Enel Latin AmericaEUFER2
16,363
1,085
945
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Network
– International
– Iberia & Latin America
• Questions and answers
• Annexes
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Enel SpAInvestor Relations
Agenda
• Opening remarks
• 2007 results
• 2008-2012 strategy
• 2008-2012 plan
– Domestic Market
– Domestic Generation & Energy Management
– Domestic Infrastructure & Network
– International
– Iberia & Latin America
• Questions and answers
• Annexes
96
Enel SpAInvestor Relations
Brent ($/bbl)
72.583 75
Coal2 ($/ton)
88.5103
82
1. Consensus figures2. CIF ARA (Rotterdam)
Fuel price scenario1
Strategic annexes - Generation
2007 2009 Long-term(2012)
2007 2009 Long-term(2012)
97
Enel SpAInvestor Relations
Italian market overview: electricity1 and gas consumption2
Operational annexes
103.9 94.2
207.3
45.9
-7.6-8.7
197.3
45.0
+0.7%
339.8337.5
20072006
Net production: otherImport
Pumped storage consumptionNet production: Enel
Electricity production (TWh)
30.2 28
20.7
34.1
20.6
31.5
2.12.2
+0.5%
84.984.5
20072006
Gas consumption (bcm)
IndustrialThermoelectricOther
Residential & commercial1. Source: Terna electricity statistical data and Enel’s estimates2. Source: Ministry of Economic development and Enel’s estimates
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Enel SpAInvestor Relations
EnelOther
42.5
132.1 133.2
120.4 102.5
22.3 39.9
42.7
20072006 20072006
-14.9%
-0.5%
+78.9%
+0.8%
145.0163.1 154.4
Italian market overview: electricity sales1
Operational annexes
Total sales (TWh)
-11.1%
Eligible market2 (TWh) Free market (TWh)
+12.1%
173.1
318.1317.5
20072006
+0.2%
1. Excluding losses on the grid. Other operators’ data are Enel’s estimates2. Including self-consumption and sales to protected customers3. Including dual energy customers
Enel’s free customers3 (thousand)
297.5
1,226.1
20072006
99
Enel SpAInvestor Relations
200712006
17.2
Enel’s international electricity sales
Operational annexes
Volumes sold (TWh)
+22.8%
53.9
1. Includes proportional consolidation of Endesa in 4Q07
10.8%International sales on Enel’s total sales 27.5%
100
Enel SpAInvestor Relations
Enel’s gas salesEnel’s gas sales
Operational annexes
2006 2007
4.5 4.9
1. Net of energy dispatched in previous years
Volumes sold (bcm)
+8.9%
2006 2007
2,331 2,462
+5.6%
Customers (thousand)
101
Enel SpAInvestor Relations
2007 Group installed capacity: breakdown by source and location
MW Hydro
14,401
4,419
2,329
-
6,742
27,891
Nuclear
-
2,441
2,050
-
-
4,491
Coal
4,959
4,687
1,254
581
377
11,858
Oil & gas ST/OCGT
14,084
2,491
-
-
1,388
17,963
Iberia
Centrel
Italy
SEE
Americas
TOTAL
Operational annexes - Generation
Renewables- other
990
1,302
-
91
194
2,577
CCGT
5,962
2,235
-
-
2,547
10,743
102
Enel SpAInvestor Relations
2007 Group net production1: breakdown by source and location
TWh Hydro
21.2
1.9
4.2
-
9.7
37.0
Nuclear
-
4.1
14.1
-
-
18.2
Coal
28.6
9.8
3.1
3.5
0.4
45.4
Oil & gas ST/OCGT
15.6
1.4
-
-
1.3
18.3
Iberia
Centrel
Italy
SEE
Americas
TOTAL
Operational annexes - Generation
Renewables- other
5.7
0.9
-
0.1
0.5
7.2
CCGT
23.1
1.9
-
-
2.6
27.6
FY07
94.2
19.9
21.5
3.6
14.4
153.5
FY06
103.9
6.1
15.6
3.1
2.7
131.4
1. 2007 figures include 24.4TWh produced by Endesa and exclude volumes from assets to be disposed of
103
Enel SpAInvestor Relations
Production mix
Group production mix
CoalCCGTOil & gas
NuclearOther renewablesHydro
Operational annexes - Generation
23.2% 24.1%
11.8%
29.5%
14.7%18.0%
20.3% 11.9%
5.1% 4.7%8.1%
28.6%
2006 2007
153.5 (TWh)131.4 (TWh)
+16.8%
23.6% 22.5%
30.3%
18.7%24.6%
25.5% 16.6%
6.0%5.4%
26.8%
2006 2007
94.2 (TWh)103.9 (TWh)
-9.3%
21.8% 26.7%
30.6%
28.2%
7.6%
2.5%4.3%
38.9%
34.1%
4.4%0.9%
2006 2007
59.3 (TWh)27.5 (TWh)
+115.6%
DomesticDomestic
International1International1
1. 2007 figures include 24.4TWh produced by Endesa and exclude volumes from assets to be disposed of
104
Enel SpAInvestor Relations
CO2 emissions vs. allowancesCO2 emissions vs. allowances
40.8
41.0 10.5
6.0
CO2 emissions (mton)
46.8
DeficitAllowances
2006
2007
51.6
Operational annexes – Domestic Generation & Energy Management
105
Enel SpAInvestor Relations
Enel’s electricity and gas distributionEnel’s electricity and gas distribution
Operational annexes
1. Net of energy dispatched in previous years
2006 2007
255.0 255.8
Volumes distributed in Italy1 (TWh)
+0.3%
2006 2007
12.643.3
+243.7%
Volumes distributed abroad (TWh)
2006 2007
3.7 3.5
Volumes distributed (bcm)
-5.4%
2006 2007
2,023 2,032
+0.4%
End users (thousand)
106
Enel SpAInvestor Relations
Income statement
Financial annexes
2006 2007 %€mn
Operating revenues
Operating costs
EBITDA
% of revenues
EBIT
% of revenues
38,513
30,494
8,019
20.8%
5,8191
15.1%
43,673
33,650
10,023
23.0%
6,990
16.0%
13.4
10.3
25.0
20.1
107
Enel SpAInvestor Relations
EBIT by business area (€mn)EBIT by business area (€mn)
Financial annexes
2,205 2,600
2,589 2,833
519
1,494
512
-46
109
-6
Market
G&EMI&NInternational
S&H1
+9.4%
+187.9%
+17.9%
+20.1%
2006 2007
1. Including intercompany adjustments
5,819
6,990
108
Enel SpAInvestor Relations
Balance sheetBalance sheet
Financial annexes
2006 2007 %€mn
Net financial debt
Shareholders’ equity
Net capital employed
11,690
19,025
30,715
55,791
23,789
79,580
377.3
25.0
159.1
109
Enel SpAInvestor Relations
Debt structureDebt structure
1. Including current maturities of long-term debt2. Including factoring and other current receivables
• Average debt maturity: 5 years and 10 months
• Average cost of debt: 5.1%
• (Fixed+hedged)/Total long-term debt: 51%
• (Fixed+hedged)/Total net debt: 47%
• Rating: S&P’s = A-/A-2 C.W. negative; Moody’s = A2/P-1 C.W. negative
Financial annexes
2006 2007 %€mn
Long-term debt
Short-term debt1
Cash2
Net debt
11,104
1,409
-823
11,690
50,816
8,014
-3,039
55,791
357.6
468.8
269.3
377.3
110
Enel SpAInvestor Relations
Financial debt evolution
12.31.2005€m
Bank loans – maturities > 12 monthsBonds – maturities > 12 monthsOther loans – maturities > monthsLong-term financial credits – maturities > 12 months
Total net long-term financial debt - Maturities > 12 months
Bank loans – maturities < 12 monthsBonds – maturities < 12 monthsOther loans – maturities < 12 monthsLong-term financial credits – maturities < 12 monthsTotal net long-term financial debt - Maturities < 12 months
Other short-term bank debtCommercial paperOther short-term financial debtShort-term debt
Factoring receivablesOther short-term financial receivablesCash at banks and marketable securitiesTotal net short-term debt (including current maturities)
Net financial debt
Net equityDebt/Equity ratioAverage cost of debt
Bank loans – maturities > 12 monthsBonds – maturities > 12 monthsOther loans – maturities > monthsLong-term financial credits – maturities > 12 months
Total net long-term financial debt - Maturities > 12 months
Bank loans – maturities < 12 monthsBonds – maturities < 12 monthsOther loans – maturities < 12 monthsLong-term financial credits – maturities < 12 monthsTotal net long-term financial debt - Maturities < 12 months
Other short-term bank debtCommercial paperOther short-term financial debtShort-term debt
Factoring receivablesOther short-term financial receivablesCash at banks and marketable securitiesTotal net short-term debt (including current maturities)
Net financial debt
Net equityDebt/Equity ratioAverage cost of debt
12.31.2006 09.30.2007 12.31.2007
2,7828,043
142-63
10,904
39948749-3
932
970275116
1,361
-374-3
-5081,408
12,312
19,4160.63
4.3%
2,7828,043
142-63
10,904
39948749-3
932
970275116
1,361
-374-3
-5081,408
12,312
19,4160.63
4.3%
28,34322,3651,447
-1,339
50,816
4612,033
235-1,4021,327
1,2803,893
1125,285
-205-97
-1,3354,975
55,791
23,7892.35
5.1%
28,34322,3651,447
-1,339
50,816
4612,033
235-1,4021,327
1,2803,893
1125,285
-205-97
-1,3354,975
55,791
23,7892.35
5.1%
3,6778,375
142-1,090
11,104
2335931
-30293
54253113
1,086
-211-10
-572586
11,690
19,0250.61
4.6%
3,6778,375
142-1,090
11,104
2335931
-30293
54253113
1,086
-211-10
-572586
11,690
19,0250.61
4.6%
5,80715,780
101-148
21,540
2586325
-995-649
2,4173,374
1115,902
-195-13
-1,8163,229
24,769
18,9761.31
4.9%
5,80715,780
101-148
21,540
2586325
-995-649
2,4173,374
1115,902
-195-13
-1,8163,229
24,769
18,9761.31
4.9%
Financial annexes
111
Enel SpAInvestor Relations
Financial debt by subsidiary
Financial annexes
EnelSpA Slovenské EP3€mn
Bonds
Loans
Other LT debt
Commercial paper
Other
Total
14,758
12,190
(965)
-
998
26,982
193
345
17
-
(58)
496
-
1,057
-
-
-
1,057
Endesa
6,313
4,886
(68)
1,543
(693)
11,983
EFI1
2,481
7,709
-
2,350
112
12,652
EIH2
571
-
-
-
(3)
569
ED4
-
1,851
-
-
(12)
1,838
Other
82
767
(44)
-
(589)
215
Total
24,398
28,804
(1,059)
3,893
(245)
55,791
1. Enel Finance International2. Enel Investment Holding3. Enel Produzione4. Enel Distribuzione
112
Enel SpAInvestor Relations
Long-term debt maturity profile as of December 31, 2007
Financial annexes
1,535 1,698 338 1,211 1,197
12,787
1,195 1,181
12,913
1,335
11,827
7,667
Fixed rateFloating rate
2008 2009 2010 2011 2012 After2012
113
Enel SpAInvestor Relations
1998 1999 2000 2001 2002 2003 2004 2005 2006 20071998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Average cost of debt6.2%
4.7%4.3%
5.9%5.5%
5.2%4.6%
5.1%4.4% 4.4%
Average residual maturity
5:4
7:7
4:13:11
4:9
7:7
5:10
5:2
6:4
Net financial debt (€bn)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
12.7
24.5
12.313.4
21.9
11.7
55.8
24.2 24.5
Fixed + Hedged/Total debt
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
53%44%
81%
61%54%
42%
80%
47%
60%53%
Financial debt statistical evolution
Financial annexes
4:4
12.1
114
Enel SpAInvestor Relations
Domestic MarketDomestic Market
Financial annexes
2006 2007 %€mn
Revenues
EBITDA
EBIT
Capex
Headcount
21,360
167
(6)
56
5,176
22,271
325
109
59
4,772
4.3
94.6
-
5.4
-7.8
115
Enel SpAInvestor Relations
Domestic Generation & Energy ManagementDomestic Generation & Energy Management
Financial annexes
2006 2007 %€mn
Revenues
EBITDA
EBIT
Capex
Headcount
15,657
3,157
2,205
897
9,573
18,207
3,541
2,600
1,167
9,306
16.3
12.2
17.9
30.1
-2.8
116
Enel SpAInvestor Relations
Domestic Infrastructure & NetworkDomestic Infrastructure & Network
Financial annexes
2006 2007 %€mn
Revenues
Power
Gas
EBITDA
Power
Gas
EBIT
Power
Gas
Capex
Headcount
5,707
5,421
286
3,418
3,297
121
2,589
2,558
31
1,459
24,701
5,762
5,437
325
3,726
3,544
182
2,833
2,743
90
1,587
22,710
1.0
0.3
13.6
9.0
7.5
50.4
9.4
7.2
190.3
8.8
-8.1
117
Enel SpAInvestor Relations
International activitiesInternational activities
Financial annexes
2006 2007 %€mn
Revenues
EBITDA
EBIT
Capex
Headcount
3,068
918
519
467
13,861
7,654
2,380
1,494
1,983
31,754
149.5
159.3
187.9
324.6
129.1
118
Enel SpAInvestor Relations
Services & HoldingServices & Holding
1. Excluding intercompany adjustments equal to -20€mn in 2007 and +3€mn in 2006, respectively
Financial annexes
2006 2007 %€mn
Revenues
Holding
Services & other
EBITDA1
Holding
Services & other
EBIT
Holding
Services & other
2,339
1,178
1,161
359
177
179
512
423
86
2,097
950
1,147
51
(59)
130
(46)
(75)
49
-10.3
-19.4
-1.2
-85.8
-133.3
-27.4
-109.0
-117.7
-43.0
119
Enel SpAInvestor Relations
Services & Holding - ContinuedServices & Holding - Continued
Financial annexes
2006 2007 %€mn
Capex
Holding
Services & other
Headcount
Holding
Services & other
84
13
71
5,237
657
4,585
133
19
114
4,958
735
4,223
58.3
46.2
60.6
-5.3
11.9
-7.9
120
Enel SpAInvestor Relations
Capex by business area (€mn)Capex by business area (€mn)
Financial annexes
897 1,167
1,4591,587
467
1,983
56
59133
84
+58.3%
2006 2007
Market
G&EMI&NInternational
S&H
+20.1%
2,963
4,929
+66.4%
+324.6%
+8.8%
+30.1%
121
Enel SpAInvestor Relations
2007 non-recurring items analysis
1. Recognition of lower charges in respect of fees for public land usage pursuant to law 266/05 paid in previous years
Financial annexes
2007€mn
Energy adjustment
Reimbursement for higher charges paid in previous years1
Total
70
45
115
122
Enel SpAInvestor Relations
Disclaimer
THESE SLIDES HAVE BEEN PREPARED BY THE COMPANY SOLELY FOR THE USE DURING INVESTORS’MEETINGS.
THE INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY VERIFIED. NONE OF THE COMPANY OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER IN NEGLIGENCE OR OTHERWISE FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THESE SLIDES OR THEIR CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THESE SLIDES OR ANY MATERIAL DISCUSSED DURING THE ABOVE MEETINGS.
THIS DOCUMENT IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON.
THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED DURING INVESTORS’MEETINGS MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY’S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND THEREFORE YOU SHOULD NOT PLACE UNDUE RELIANCE ON THEM.
FORWARD LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESUTLS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN ENEL’S CORE ENERGY BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT AND FUTURE CAPITAL EXPENDITURE.
PURSUANT TO ARTICLE, 154-BIS, PARAGRAPH 2, OF THE UNIFIED FINANCIAL ACT OFFEBRUARY 24, 1998, THE EXECUTIVE IN CHARGE OF PREPARING THE CORPORATE ACCOUNTING DOCUMENTS AT ENEL, LUIGI FERRARIS, DECLARES THAT THE ACCOUNTING INFORMATIONCONTAINED HEREIN CORRESPOND TO DOCUMENT RESULTS, BOOKS AND ACCOUNTING RECORDS.
123
Enel SpAInvestor Relations
Contact us
Investor Relations Team ([email protected])
Visit our website at:
www.enel.it (Investor Relations)
Visit our website at:
www.enel.it (Investor Relations)
• Luca Torchia (Head of IR)
• Elisabetta Ghezzi
• Donatella Izzo
• Fausto Sblandi
+39 06 83053437
+39 06 83052708
+39 06 83057449
+39 06 83052226
+39 06 83053437
+39 06 83052708
+39 06 83057449
+39 06 83052226